FY26 | Pakistan

• CAD gap hits $649m in June • Foreign direct investment declines 34pc to $1.64bn KARACHI: Pakistan ended the outgoing fiscal year with a current account deficit (CAD) of $139 million, reversing a surplus of $1.838 billion recorded in 2024-25, the State Bank of Pakistan reported on Friday. The deficit remained negligible compared to the sharp monthly deficit recorded in June 2026, largely because of strong remittance inflows during the year. The deficit had been widely expected after the Gulf war, which erupted on Feb 28, disrupted oil prices and affected Pakistan’s economy. However, the current account deficit remained under control mostly because of remittances, which rose to $41.585bn in FY26 from $38.3bn in FY25, an increase of about $3.3bn. SBP data showed that the country posted a current account deficit of $649m in June compared to a surplus of $500m in May. The current account had posted a surplus of $220m in June 2025. The trend shows that the economy was largely supported by remittances, as exports ...

Pakistan received a record $41.6 billion in workers’ remittances in the last fiscal year (FY26), up by around 8.6 per cent compared to FY25, according to data released by the State Bank of Pakistan (SBP) on Thursday. Adviser to the Finance Minister Khurram Schehzad said the figure was Pakistan’s “highest-ever annual remittances in history”. “This historic milestone reflects the unwavering confidence of overseas Pakistanis and reinforces Pakistan’s external sector resilience, stronger foreign exchange buffers, and improving macroeconomic fundamentals,” he said on X. The adviser termed the inflows a “record achievement”, adding that the growth over the last three years had been “phenomenal, powered by millions of hardworking Pakistanis across the globe”. The latest figures were in line with the government’s expectations that total remittances would surpass the official target by the end of FY26 on June 30. The government had initially projected inflows of $41bn before revising the target to $40bn. While FY26 sa...

KARACHI: The grounds for an increase in the policy rate have largely disappeared ahead of the State Bank of Pakistan’s (SBP) upcoming monetary policy announcement, as global oil prices have either remained stable or eased despite heightened tensions in the Gulf, market participants said. The Monetary Policy Committee (MPC) is scheduled to meet on June 15 for what will be the final policy review of FY26. The only increase in the policy rate during the current fiscal year came in the previous review on April 27, when the SBP raised the benchmark rate by 100 basis points to 11.5 per cent. The increase was attributed to geopolitical tensions following the conflict in April, which pushed oil prices higher and disrupted global supply chains. However, analysts said developments over the past month have reduced concerns over a prolonged conflict. Prospects for a deal between the US and Iran have improved, while a ceasefire remains in place despite sporadic attacks by both sides. Iran also targeted US bases in several...

While macroeconomic stability improved in the first half of fiscal year 2026, the war in the Middle East poses risks to the economic outlook amid heightened uncertainty, the State Bank of Pakistan (SBP) said on Tuesday. The SBP released its Half Year Report 2025-26 (The State of Pakistan’s Economy) on Tuesday, showing that Pakistan’s macroeconomic stability strengthened in the first half of the fiscal year despite headwinds from uncertainty regarding global trade and domestic floods. However, the report noted that the war in the Middle East poses “significant risks to the macroeconomic outlook”, as supply chain disruptions are likely to affect the inflation trajectory, external trade and remittance flows, and the country’s economic activity, according to an SBP press release. Discussing the outlook for FY26, the report notes that the latest data on high-frequency indicators — including Purchasing Managers’ Index (PMI), LSM and construction — suggests that economic activity maintained the momentum through Febr...